This is an ongoing list; names will be filled in due time.
VPA was created by corporate vice presidents in New York for their amusement. Also for their survival. After 30 years, it now is open to people with similar experience. Participation is free. Participation is anonymous.
Carpenter, Michael; Denunzio, Ralph—The Kidder Peabody Saga
Ralph Denunzio runs a company like blind man weaving through traffic
What did we expect out of Jack Welch? He who sleeps with dogs gets fleas, right? He wouldn’t have bought Kidder Peabody if he’d known there was a “skunk,” but we imagine he was already pretty used to the smell at that point. The more changes he made (ie, hiring Carpenter), and the more he tried to soothe customers’ concerns by pouring money into Kidder, the more errant the company’s path became—like a petulant child who won’t get a job and move out. But this was Welch’s child.
Carpenter may not have been the best choice. He tried to turn around the Peabody’s poisonous culture with a bold plan to improve the traders, to improve their personal business ethic—without having a brokerage license himself. And Peabody dealt securities! Last we heard the CFPB was targeting him for ripping off minority communities.
Kidder Peabody’s problems didn’t start with the Joe Jett scandal, or any other scandal you can think of (Martin Siegal, bonds trading—whatever suits your fancy). It started with their culture of aggressive, reckless trading in the unmitigated pursuit of profit. It’s a culture that finds roots in Walter Wriston’s (who was on the board of GE at the time of their purchase of Peabody) philosophy and fruits in John Stumpf’s massive scam. The reason Jack Welch kept uncovering problems in K-P is that the cancer of greed had spread to all of its branches—and throwing money to fix it only enabled its corruption. Stressing “the high-powered profit growth” that GE’s businesses were “supposed to have,” Welch sought the very end that had poisoned Peabody’s culture in the first, with their blind pursuit of profit. When profit is the bottom line of a deal, you stay staring at that bottom line like everything above it, everything that got you there doesn’t exist. That’s how you get your Joe Jetts. That’s how you get ’07.
What made the Time-Warner-AOL merger such a bust? Case was doing so well with AOL in the 90s, and then…?
Big hopes, little results. Gerald Levin, CEO of Time Warner, predicted 30% growth from the merger—no matter how you split it, it would be hard to make that up to investors, even without the bursting of the internet bubble soon after.
With friends like these…
“Above all, what Time Warner executives and investors resent is this: with a remarkable sense of timing, Case used AOL's then inflated stock to buy their company. That sleight of hand took place in January 2000, just two months before the meltdown of Internet stocks. “
Such contrasts in company cultures, attitudes, and managerial styles can’t exactly be a recipe for success.
This article from Vanity Fair really puts it all out there for us to see: http://www.ninamunk.com/SteveCasesLastStand.php
Cayne, James—Bear Stearns
Having made the holy list of Time’s “25 People to Blame for the Financial Crisis,” Jimmy Cayne stands as one of the more heartwarming stories of catastrophic failure among the nefarious actors in the crisis. Almost all of his money was invested in Bear Stearns, topping at almost $1 billion in stocks. When the economy collapsed, so did his wallet, and he lost nearly 95% of his fortune as a result. After selling his remaining shares to Chase, Cayne struck out to live on his meager $60 million windfall. Tough times, man.
Some people blame his pot smoking, which, first of all, nice dude. Second of all, wake up and manage your damn hedge fund.
Dick Cheney was actually a bad CEO? No kidding!
Although this website is about business, and Cheney is primarily known as a public “servant,” he is one of the greatest examples of the revolving door between the public and private sectors that has so poisoned our politics—in essence, he has been central in making concerns of the public privy to the whims of the private. Politics is business, and so he makes our list. Here’s a little refresher from the Atlantic on why we despise this man.
Connolly, Walter—Bank of New England
Bad banking practices taking down New England banking system? Kind of like the RISDC crisis of 91?
“Federal regulators, wary of troubled real estate loans, have visited other area banks, most notably the Bank of Boston and the Shawmut National Bank Corporation. Regardless of the findings, bankers say, the Bank of New England debacle has tarred them all. It has already depressed their own shares, making it more difficult for them to raise capital and leaving them more vulnerable to takeovers.”
Same old story of reckless lending in order to serve personal interests of empire building, bonuses, etc.
He gets really screwed—doesn’t get the fancy severance packages executives normally get—its karmic.
Clausen, A.W.—Bank of America
Corzine, John—MF Global Holdings